US Warned Nations on Chinese Loans but Quietly Took Them Itself

For years, Washington has urged nations around the world to be cautious of Chinese state bank loans, warning that Beijing uses money as a tool of influence and control. But a startling new report has exposed a surprising contradiction: the United States itself has received more Chinese state-backed financing than any other nation—by a massive margin.

According to AidData, a research lab at the College of William & Mary in Virginia, China’s state lenders have quietly funnelled over $200 billion into US businesses over the past 25 years, much of it hidden behind layers of shell companies in tax havens like the Cayman Islands, Bermuda, and Delaware. The loans were often structured to disguise their true origins, masking Beijing’s role in buying into American companies, including those tied to national security and sensitive technologies.

A Hidden Financial Network With Global Implications

The findings reveal a complex and highly sophisticated web of offshore financing that extends far beyond developing nations. China’s state-backed money has flowed into wealthy countries such as the US, UK, Germany, Australia and the Netherlands—many of them close American allies. This lending, often directed by Beijing’s central government and the Communist Party’s top financial bodies, aligns closely with China’s long-term strategic ambitions.

William Henagan, a former White House investment adviser, warned that the scale and secrecy of Beijing’s hidden lending gives China influence over critical technologies.“China was playing chess while the rest of us were playing checkers,” he said. “Wars will be won or lost based on who controls the technologies that drive an economy.”

Loans Used to Buy Into High-Tech US Companies

Much of China’s shadow lending helped Chinese-owned firms buy stakes in American companies deeply tied to defence, robotics, semiconductors and biotechnology. Some of these cases went unnoticed for years, only coming to light after regulatory investigations.

One such example was the $1.2 billion loan in 2015 used to help a Chinese company acquire an 80% stake in Ironshore, a US insurer that handled policies for CIA and FBI personnel. The funding was routed through a Cayman entity, making it difficult for American regulators to detect its true source. Once officials realised the national-security risk, they forced the Chinese buyer to divest.

In another case in 2016, China’s Export–Import Bank financed the acquisition of a Michigan robotics firm—part of Beijing’s larger “Made in China 2025” strategy aimed at dominating high-tech sectors like robotics, quantum computing and biotech.

After this strategic roadmap was announced, the share of Chinese-backed acquisitions in sensitive sectors surged from 46% to 88%, according to the AidData researchers.

A Trillion-Dollar Global Web of Influence

The report concludes that China has lent more than $2 trillion worldwide from 2000 to 2023, double previous estimates. While the Belt & Road Initiative attracted global attention for its impact on developing countries, this new data shows that advanced economies are deeply entangled in China’s financial reach as well.

Brad Parks, AidData’s executive director, noted the irony of the situation:“The US has been calling China a predatory lender for a decade. The irony is extremely rich.”

US Scrutiny Has Improved—but China Has Adapted

Since 2020, Washington has strengthened screening mechanisms like the Committee on Foreign Investment in the United States (CFIUS). But China, too, has evolved—setting up more than 100 overseas bank branches and lending through offshore entities that hide their origins more effectively.

This cat-and-mouse game has made it increasingly difficult for regulators to trace Chinese loans, especially when they are tied to acquisitions in strategic industries.

Scott Nathan, former head of the US Development Finance Corporation, said the lack of transparency is deliberate:“China uses shell companies, confidentiality agreements and redactions to make it nearly impossible to see the full picture.”

Why This Matters Now

The report arrives at a time when US-China tensions are escalating on nearly every front—technology, trade, defence and global influence. As both nations compete for technological and military dominance, the revelation that Chinese state-backed money is embedded inside the US economy raises serious concerns:

• How much access does China have to US technologies and companies?

• Could hidden financial ties influence national security?

• Are US allies exposed to similar undisclosed risks?

• How far has China’s financial reach really extended across the West?

Brad Setser, an adviser to the US Trade Representative, warned that the world needs to fully grasp China’s long-term strategy:“It’s important we understand what China is doing—because they do not make it easy.”

A Wake-Up Call for Washington

The findings make one thing clear: China’s global financial strategy is far more extensive, strategic and concealed than previously understood. And the United States—despite years of warnings to others—has become its single largest recipient.

As the geopolitical rivalry sharpens, the true extent of China’s financial footprint in American industries is likely to face unprecedented scrutiny in the months ahead.